Employee Benefits & Adoption Rates for a Successful Paycard
Program
George Mavrantzas, Director of Special Projects, Global Cash Card
Agenda and Discussion Topics
Overview of Current Payroll Card Space
Next Steps: An Action Plan
Employer and Employee Benefits
Additional Considerations of Implementing Paperless Payroll
Sample Case Study
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Key Objectives: What You’ll Learn
How implementing a paycard program can bring savings to your company’s bottom line
How paycards can take your company’s payroll 100% paperless
Learn the process for choosing and implementing a successful paycard program
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How is prepaid used today?
• Helps consumers budget spending more effectively
• Offers a more secure, convenient, and cost-effective alternative to cash and checks
• Provides a secure access to funds
• Allows better access to funds for everyday purchases, bill payment, and receipt of deposits
• Provides access to a financial account for those who do not have/use a traditional banking account
• Accepts electronic payments from customers who wouldn’t have the ability without prepaid
• Wins new customers through rebates/loyalty programs
• Provides an efficient and cost-effective way of providing wages and healthcare benefits to employees
• Gives employees instant access to their wages vs. checks
• Provides greater reliability for the deliveryof benefits
• Gains efficiencies and reduces costs by transitioning to electronic payments
• Saves millions of dollars in administrative costs associated with paper-based programs such as lost or stolen check replacements, bank processing and handling fees, check fraud and check printing costs
• Provides greater reliability for the delivery of benefits
Consumers Businesses Government
Payroll Cards – Market Awareness
Visa Payroll Card was featured as one of the most innovative new products by Business Week magazine1
The Mayor and Treasurer of SF launches paperless pay initiative2
Over 7 ½ million prepaid cards with Direct Deposit as of 2013
1 Business Week, 12/17/01 The Best Products of 2001: Special Report2 http://www.currencsf.org/3 United States Census Bureau Supplemental Survey of Unbanked/Underbanked 2011
Cost of Paper Checks for Employees
Americans without bankaccounts pay
Someone earning
at check-cashing outlets, paydaylenders and bill pay centers1
a year would spend approximatelyin check-cashing and moneyorder fees to pay their bills2
1 M. Fellowes, M. Mabanta. “Banking on Wealth: America’s New Retail Banking Infrastructure and Its Wealth-Building Potential.” Brooking Institution. 2008.http://www.brookings.edu/~/media/research/files/reports/2008//1/banking%20fellowes/01_banking_fellowes.pdf2 “2010 Report on Check Casher and Basic Banking Fees.” Massachusetts Division of Banks. 2010. http://www.mass.gov/ocabr/docs/checkcashreport2010.pdf
Employees pay up to
to cash their payroll checkswith a check cashier2
3%$8B
$26K $750
What do Employers Have to Say About It?
Program Satisfaction
86%Implementation Was Easier Than Expected
84%Awareness of Payroll Card Program
78%Currently have a payroll card program
22%Source: Results based on an online employer survey by an independent research firm, Decision Analyst, Inc., as a commissioned agent of Visa, among business executives who make payroll decisions for their business. See appendix for details.
Reasons for Implementing a Payroll Card Program
“Some employees don’t have or prefer not to have bank accounts.”
“Easy and convenient for those who don’t have bank accounts.”
“Payroll cards make it easier for business to pay employees who can’t orwon’t use direct deposit.”
“It became easier for employees that don’t want or have a bank account touse the card. Some prefer it over a check because they do not have togo to the bank and cash it. It’s more convenient.”
“We wanted to give our employees without bank accounts the opportunityto have direct deposit.”
“Employees express the desire to have this option.”“Over 90% of our employees agreed to participate voluntarily.”
“Request of employees due to convenience of using the card.”
“Some of the employees suggested it.”“People in our job love the idea and how it works so we got this card.”
“There are some employees who prefer this method.”“Employees need it.”“It was strongly requested by out employees.”
Source: Results based on an online employer survey by an independent research firm, Decision Analyst, Inc., as a commissioned agent of Visa, among business executives who make payroll decisions for their business. See appendix for details.
14%
30%
37%41%
17%
17%2011 2013
Cost Savings
For the Employees
Ease/Convenience
vs.
vs.
vs.
2011
2011 2013
2013
Current Payroll Card Environment
• Programs will be Visa• Beware, not all are branded, some are PIN
networks only• Signature and PIN usage• Provides fraud protections that come
standard with these brands• Accounts are FDIC Insured and Protected by
Regulation E• Some states even allow mandating of
electronic pay, and these cards are an acceptable method
Current Payroll Card Environment
Successful models include the first transaction free each pay period which can be used as follows:
• Free ATM• Free Convenience Check Option• Free Bank Teller Transaction
• The convenience check and bank teller transactions meet the “pay to the penny” requirement that all states have
Does the paycard provider help train employees how to use the card correctly?
▪ Customer Services should work with employees and refund fees to help them learn to use the card correctly
Current Payroll Card Environment
Other key features to be concerned about Customer Service – can make or break a
program. ▪ Ensure it is always FREE, 24X7X365 and multi-lingual▪ Ensure it is in house and not outsourced
Implementation▪ Must be delivered by an experienced staff
Technology capabilities▪ Texting▪ Email Notification▪ Mobile Applications
Other associated programs▪ Online mall / discount center▪ Expense Manager
Current Payroll Card Environment
Fee structures Employees should be able to use the cards free
of any fees if you utilized properly (FREE pay to thepenny access)
No start up fees or load fees for the employers
No start up, activation, or monthly fees for the employees
▪ Some programs still have these fees
Compliance
Important items to consider FDIC Insured Regulation E VISA Zero Liability PCI Level 1 Certified SSAE 16 Audited Call Center CISP Certification
Compliance
State Regulations – How does the provider advise you regarding
compliance?– What advice do they provide and is it for the life of the
program?– Legal– Professional Associations (American Payroll
Association, Association of Financial Professionals, American Staffing Association, etc.)
– Quarterly Newsletter– Monthly Tidbits
Where you can Mandate Paperless Pay
• Alabama• Arizona• Colorado• Delaware• Indiana• Kansas• Kentucky• Louisiana• Maine
• South Carolina• South Dakota• Tennessee• Texas• Utah• Washington• Wisconsin
*The laws or enforcement positions in the “Green” states can be interpreted as allowing paperless pay through direct deposit and payroll cards
• Massachusetts• Michigan• Mississippi• Missouri• Nebraska• North Carolina• North Dakota• Ohio• Oklahoma
“Green” states permit Paperless Pay
“Yellow” states with restrictive Paperless Pay
“White” states require voluntary participation
AK
HI
OH
WA
CAVA
MI
GA
KS
IA PA
WVDE
MS
ORSD
MO
WI
MN
KY
SC
FL
NC
UT
AZ
ND
NM OK
TN
NE
WY
LA
IL IN
AR
VT
NY
CO
AL
MT
ID
NV
TX
MD
ME
NJ
DC
MARI
CT
NH
*The laws or enforcement positions in the “Green” states can be interpreted as allowing paperless pay through direct deposit and payroll cards
State Regulations in “Yellow” States
Florida – Choice of paycard or direct deposit can be a condition of hire for employees. However, already employed individuals receiving checks cannot be terminated for refusing to be paid electronically.
Iowa – Employees hired on or after July 1, 2005 may be given the option of being paid on a paycard or by direct deposit.
Virginia – Employees hired after January 1, 2010 may be given the option of being paid on a payroll card or by direct deposit.
Corporate Responsibility
Initiatives Reduce Paper Production/Delivery Reduce Waste Green Initiatives Reduce Energy Consumption Improve our Environment
Eliminating the paper out of your payroll process will contribute to corporate responsibility Promoting 100% direct deposit fosters corporate
responsibility!
Promote Direct Deposit
How does your disaster recovery plan impact the delivery of pay to your employees?
Promoting direct deposit to a bank account or a paycard will ensure: Employees are not at the mercy of the mail or
other delivery methods when those methods are impacted by a hurricane, snow, or any inclement weather.
Instant funding can be done remotely (away from the impacted area) and not requiring employees to come into the office to get paid.
Food For Thought
Top 10 Considerations when evaluating a paycard provider
1. What is the cost to implement a paycard program?2. What are the fees to the employees?3. Is the program easy to use, both by the employer and the
employee?4. Is the program PCI level 1 & SSAE 16 Audited?5. What is the level of customer service and is it outsourced (is the
provider a reseller or a direct processor?)6. Does the paycard provider have an effective implementation
program?7. Is the paycard provider a specialist in paycards or is it an adjunct
to their primary business?8. What level of field support does the paycard provider provide?9. Does the paycard supplier provide state of the art technology?10.Is a disaster recovery program built into the paycard system?
What’s in it for the Unbanked Employee?
Convenience factors Company obligation to minimize
payroll distribution risks (uncontrollable acts)
Purchasing power via a branded card Promote at least 5 ways of accessing
their pay without paying a dime
Behavioral Change Initiatives
• Implement pay selection enrollment form
• Consider charging EEs for stop payments
• Where applicable, mail all paper paychecks
• If checks can’t be mailed, consider changing pick-up time for payroll check distribution
• Consider one-time conversion incentive
Keys to Employee Adoption
Promote savings account component Companion cards Competitive fee schedule Allow multiple EFT accounts Partner with ambassadors Utilize instant issue and signature
paycards Make the process simple and easy (ESS) Consider other incentives – just ask
Marketing Efforts – Next Steps
• Employee PAYcard signage• Employee communication plan x 3• Frequently Asked Questions doc• Provide locations of surcharge-free
ATMs in and around business vicinity • Consider random drawings for loaded
PAYcards ($50, $100, $500 increments)
• Post-implementation metric reporting – Did you get the expected results from the initial phase I rollout?
Proven Results Time Warner Cable
Over 3,000 paycards
95% Electronic Payroll Participation
Paycards utilized for CA term wage payments
Eliminated state mandated waiting time penalties
30% increase in print suppression rates
Significant component to BCP strategy
2012 Prism Award Winner for Overall Best Practices
Next Steps – Plan to Win
Create a vision Identify pain points Communicate Strategy Prepare for Change Pilot Solution Implement Rollout Measure for Results Sustain Momentum
Key Learner Outcomes: What You’ve Learned
How implementing a paycard program can bring savings to your companies bottom line
How paycards can take your company’s payroll 100% paperless
Learn the process for choosing and implementing a successful paycard program
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Your Action PlanSuggested “Next Steps” to use What You’ve Learned Today:
What Will You Do Within Your Own Organization?
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Calculate the savings your company can realize by moving to paycards
Research your state laws regarding paycards
Schedule a demo with Global Cash Card to learn more about our paycard solution
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